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Saturday, March 1, 2008

Boustead nets RM179m in Q4

DIVERSIFIED Boustead Holdings Bhd said its fourth quarter net profit rose eight per cent as better sales were offset by higher interest and tax charges.

It is bullish of its performance this year, which will be driven by strong palm oil prices and better demand for its properties.

Boustead also expects its banking arm, Affin Holdings Bhd, to do better this year.

"Property Division will continue to be a major profit contributor, with profit deriving mainly from the Mutiara Damansara and Mutiara Rini Johor projects.

"Affin Group is expected to produce better results for the coming year," it said in a statement to Bursa Malaysia yesterday.

It reported a net profit of RM179.2 million for the quarter to december 31, 2007. Revenue more than doubled to RM2.2 billion.

For the full year, net profit more than doubled to RM477.7 million while revenue was up 40 per cent to RM5.75 billion.

This was mainly boosted by a RM162 million gain from an asset-backed securitisation deal.

Boustead plans to pay 18 sen a share in dividends, which includes a 10-sen bonus payout.

Affin Group grew its pre-tax profit to RM352.97 million, up 12 per cent mainly due to the increase in net interest income, other operating income and Islamic banking income.

Loan loss provision and impairment losses were also lower.

By New Straits Times

Regenerating Petaling Jaya

Jaya One leads the way for lifestyle changes in PJ

SOON to become a prominent landmark fronting Jalan Universiti, Petaling Jaya, Jaya One will be among one of the larger development in Section 13, says developer Tetap Tiara Sdn Bhd.

Its executive director Charles Wong says Section 13 is expected to have among the first run of new commercial projects under the “ongoing regeneration of Petaling Jaya”.

Jaya One covers 11 acres of Section 13’s 200 acres.

The other areas that will be undergoing various changes include SS2, Kelana Jaya, and Section 52, commonly known as PJ New Town.

(There are plans to convert some of the industrial pockets into commercial title by the local authorities.)

“The term 'regeneration' encompasses a host of changes. This include a change in the buildings in the area, a change in identity from industrial to commercial, for example, all of which boils down to a change in lifestyle for the people in that area,” Wong says.

Wong says Section 13 comprises 200 acres and Jaya One will occupy just over 11 acres of it. The first phase is now complete and is expected to be fully tenanted by the middle of this year.

Another new development in Section 13 is Jaya33. Close by is 3 2 Square, located in Section 19. A couple of factory lots are undergoing development, to be replaced by office buildings.

“So changes are afoot along Jalan Semangat, which divides Section 13 and Section 14. Jaya Supermarket will be pulled down and something better will come up. All these are part of the regeneration process,” says Wong.

Wong is following the footsteps of his father, L&H Property Development Sdn Bhd executive chairman Wong Chee Kooi. L&H is the main shareholder of Tetap Tiara.

Says Wong senior: “I used to see the Alcom and Colgate factory coming up in the area in the late 1950s and early 1960. At that time, I was working for a consultant and used to come around to see the place. Now my son is developing Jaya One. This is certainly exciting. It says a lot about the growth in this once quiet satellite town of Petaling Jaya.”

Section 13, in terms of land value, is undervalued. Once converted to commercial land, its value will up very quickly, says Wong.

Wong says the other industrialised area is the Jalan Tandang vicinity. Although earmarked as industrial land, Section 13 is expected to be converted to commercial land. Right now, this is being done on an ad hoc basis as factories move out and land owners find uses for their land.

“It is natural for land owners to maximise the value of their land and we see this happening around us,” says Wong senior.

Jaya 33 Sdn Bhd, for example, will be converting the adjacent land into a high-rise block, comprising either office units or service apartments while Tetap Tiara has a second piece of land of about 3.8 acres, behind Jaya One, which it will mull over later on.

“Section 13, in terms of land value, is undervalued. Once converted to commercial land, its value will up very quickly,” Wong says.

When Jaya One was first launched several years ago, its standard office lots were sold for RM220 per sq ft.

They are transacting for about RM350 psf today while the ground floor shop lots were launched at about RM750 psf.

Buyers of ground floor shop lots had to buy the first two floors of offices as well. Now investors are letting go of the office units.

“Nobody wants to sell the ground floor shop lots so it is not possible to compare how much they can fetch today,” says Wong senior.

He says about 40% bought for their own use while 60% were investors.

Tetap Tiara is keeping the centre portion, known as Palm Square. This comprises a cluster of eight two-storey developments, a theatre, and an annex block. They are also managing the car park. They will maintain the place until a committee has been set up.

“What is crucial for Jaya One is the retail mix and maintenance so we will watch this closely,” says Wong.

About three-quarters of the nett built-up of about 400,000 sq ft comprises offices and the rest retail. About 90% of the retail portion will be food and beverage (F&B) outlets.

“Because our frontage faces Jalan Universiti, two colleges have shown interest. This is a change of plans for us, but we view this positively. We had initially wanted showrooms to face Jalan University. A foreign bank has also shown interest. So our plans are changing. The F&B side is going according as planned. So there are positive surprises,” says Wong.

The retail offices are being rented out at between RM2.30 and RM2.50 psf for the standard lots of 1,800 sq ft. Corner units are going for RM3 psf. Jaya33 prices are higher at around RM4 psf. Their floor plate is also larger, between 5,000 q ft to 10,000 q ft, with a certain degree of flexibility to go right up to 20,000 q ft.

Section 19’s 3 2 Square office lots are less than 2,000 sq ft.

Wong cautioned it is not possible to benchmark Jaya One against any other development because there is none similar to it.

“Not on this scale, at least, because 11 acres is a huge development, once phase 2 is complete,” he says.

While developers are happy with the changes in development in the area, Petaling Jaya residents are concerned with the congestion that is taking place around them. Their concerns include parking woes, bumper-to-bumper traffic during peak and certain off-peak periods, and the lack of improvement in public transport within Petaling Jaya.

Complaints to the local authorities have increased but even as these new developments spring up, residents continue to demand a hearing.

But when a building is up and tenanted, what else is there to hear, or to be said? There is a greater force - monetary gains - at work and growth comes at the expense of something else. In this case, the quiet and tranquillity of a satellite town and her residents.

By The Star (by Thean Lee Cheng)

KLCC condo prices expected to double

LUXURY properties in the Kuala Lumpur City Centre, which cost around RM1,500 per sq ft now, could double in price once two new projects are launched this year, an industry executive said.

They are the six-star Four Seasons Hotel and Four Seasons serviced apartments and Millennium Residences.

“They are seen as the crème de la crème and will set a new benchmark pricing in the city area,” said Knight Frank Malaysia managing director Eric Ooi Yew Hock.

Four Seasons, which will be built near the Petronas Twin Towers for RM1.6 billion, is a project by Tan Sri Syed Yusof Tun Syed Nasir and the Sultan of Selangor, Sultan Sharafuddin Idris Shah.

Millennium Residences at Jalan Bukit Bintang, is being developed by City Developments (Malaysia) Sdn Bhd, which is part of Singapore’s Hong Leong group of companies for some RM500 million.

“Property prices in the Klang Valley have been boosted by foreign direct investments,” Ooi said on the sidelines of the 1st Malaysian Property Summit 2008 recently.

About half of the high-rise condominiums in the city centre were bought by foreigners and the trend is expected to continue, he said.

Prices of high-end condominiums in Bangsar, Sri Hartamas, Damansara Heights and Mont’ Kiara are also reaching 700 per sq ft to RM1,000 per sq ft.

“What the suburbs will do is to move beyond RM1,000 per sq ft to touch RM1,500 per sq ft this year,” Ooi said.

By New Straits Times (by Sharen Kaur)

UDS Capital: Five corridors to spur construction and housing

MUAR: UDS Capital Bhd sees the five economic growth corridors in the country spurring development activities, especially in the construction and housing sectors.

The five are the Iskandar Development Region, Northern Corridor Economic Region, East Coast Economic Region, Sabah Development Corridor and Sarawak Corridor of Renewable Energy.

Executive chairman Datuk Koh Kim Toon said these activities would augur well for the company’s furniture manufacturing and trading businesses.

Datuk Koh Kim Toon (right) and Datuk Tan Khoon Hai.

Its wholly-owned subsidiary Syarikat U.D. Trading Sdn Bhd is involved in the dealing of furniture, plywood, small hardware, parts, equipment and construction materials.

Koh said the inflow of local and foreign investment to these growth corridors would create demand for residential and commercial properties.

“Domestic demand for furniture and building materials is likely to increase in tandem with activities taking place in the corridors,” Koh told StarBiz after the company AGM on Monday.

As such, local furniture manufacturers should not be unduly worried about the subprime problem in the US that had slowed demand for Malaysian-made furniture, he said.

Koh said the company exported 60% of its furniture, with the US market accounting for 15% of its exports. The rest goes to Europe, Middle East and Japan.

Meanwhile, executive director Datuk Tan Khoon Hai said the company wanted to strengthen the trading activities of hardware and laminated chipboard for projects in the local construction industry.

He said US demand for made-in-Malaysia furniture was expected to pick up when the US economy improved.

“The anti-dumping move by the US against Chinese-made furniture will see more orders come to Malaysia,” said Tan.

With the US also likely to impose the same ruling against furniture from Vietnam, buyers would have to look at other sources including Malaysia, he said.

Tan said the Vietnamese authorities now required foreign investors to have deposits or bank guarantees before setting up operations to protect the welfare of local workers.

He said the move had caused foreign investors to relocate their operations from Vietnam and more investors were coming back to Malaysia.

Tan said 35% of the company’s furniture now catered to the middle and higher-end market segment, and 65% to the lower to middle-end bracket.

“We are targeting to have equal contribution from both segments in the next one or two years,” said Tan.

For the financial year to Aug 31, 2007 (FY07), UDS cut its pre-tax loss to RM2.13mil on improved turnover of RM135.89mil compared with RM9.2mil and RM116.11mil respectively in FY06.

By The Star - StarBiz (by Zazali Musa)

UK varsity plans Iskandar campus

BRITAIN'S Newcastle University will set up its first international branch campus within the Iskandar Development Region (Iskandar), putting the price of medical studies within reach of Malaysians.

South Johor Investment Corp Bhd (SJIC), the promoter of Iskandar, said the university will offer degree courses in medicine and bio-medicine studies.

"While the university's Iskandar campus is expected to be completed in 2011, the target date for the first intake of students will be for September 2009," SJIC said in a statement.

Higher Education Minister Datuk Mustapa Mohamed handed over the letter of invitation to the university's dean of International Medical Education professor Reg Jordan in Johor Baru yesterday.

Mustapa said students could get a Newcastle University medical degree at about half the cost of doing so in the UK.

"The cost for completing a course in the UK is currently about RM1 million for a five-year programme," he said.

According to SJIC, the Newcastle University will be housed in the Iskandar region under its EduCity concept.

EduCity is a fully integrated education hub where all the educational disciplines will come together in one location.

"EduCity serves to provide a platform for facilities from world-renowned universities to work together within a multi-varsity university environment," SJIC said.

SJIC will develop the campus, accommodation and recreational facilities for EduCity, and is currently finalising the design of the campus. Infrastructure work is expected to commence in the third quarter this year.

By New Straits Times

UEM World net profit surges 382%

Full-year revenue also rises to a record RM7bil

PETALING JAYA: UEM World Bhd announced a record RM7bil revenue for the financial year ended Dec 31 (FY07), an increase of 46% compared with RM4.8bil in FY06.

Group net profit saw 382% growth to RM939.2mil against RM194.9mil in FY06.

According to a company statement, UEM World had set aggressive headline key performance indicators (KPIs) for 2007.

Targeted returns for shareholders were exceeded with return on equity for the year at 41% compared with the target of 38% while revenue growth at 46% fell short of the target of 65%.

In the statement, chief executive officer Datuk Ahmad Pardas Senin said: “Our 2007 performance is based on excellent contributions from most of our units and will be the platform for further improvements, going forward.”

“Sustainability” was the key theme for establishing the group's KPI targets for FY08, which was a revenue growth of 13% and a return on equity of 13%.

Boustead Holdings Bhd posted a 114% increase in pre-tax profit to RM828.81mil for FY07 compared with FY06's pre-tax profit of RM386.43mil.

At the same time, the group's net profit after minority interest grew 127% to RM477.74mil from RM210.18mil in FY06.

For the year, the plantation division contributed an operating pre-tax surplus of RM200.59mil compared with RM34.94mil in FY06 mainly due to the good palm product prices.

Property development activity recorded a 76% better pre-tax profit of RM85.28mil due to an increase in progress billings and land sales, while good occupancy and room rates were achieved by the group's Royale Bintang hotels.

The heavy industries division ended the year with a pre-tax gain of RM383.46mil, with the main contributor coming from Boustead Naval Shipyard Sdn Bhd that registered a pre-tax profit of RM380.89mil.

Meanwhile, the finance and investment division posted a significantly improved profit of RM69.5mil compared with RM8.04mil in FY06.

Boustead's banking division, Affin Holdings Bhd registered 12.3% higher pre-tax profit of RM353mil for FY07 compared with RM314.4mil in FY06.

In a statement, the bank said this was mainly due to the increase in net interest income and Islamic banking income totalling RM58.7mil as well as the reduction in impairment loss on securities, loan loss provision and finance cost of RM52mil, RM11.5mil and RM10.2mil respectively.

This, in turn, was partially offset by the rise in overhead expenses of RM76.4mil, higher share of losses in jointly controlled entity of RM7.3mil, lower other operating income of RM4.5mil and lower write-back of profit equalisation reserve of RM4.7mil.

Affin reported a higher revenue of RM2.18bil for FY07 compared with RM1.99bil revenue in FY06.

PPB Group Bhd saw a 47% rise in pre-tax profit for continuing operations to RM577mil for FY07 versus RM392mil in FY06.

Wilmar International Ltd, an associate company since May 2007, contributed RM226mil.

Lower raw sugar prices and improved selling prices of specialty flour, animal feed and farm products also contributed to the better results.

Net profit from the discontinued operations – PPB Oil Palms Bhd, PGEO Group Bhd and Kuok Oils & Grains Pte Ltd – was capped at RM168mil following their disposal to Wilmar, which was completed by end-June 2007.

Meanwhile, the group's revenue for continuing operations of RM2.99bil for FY07 was 15% higher than RM2.59bil in FY06. This was mainly due to higher sales volume generated by the sugar refining division and improved prices of specialty flour and animal feed products, a company statement said.

Transmile Group Bhd posted a larger net loss of RM279.6mil for FY07 against a net loss of RM63.8mil in 2006.

Revenue was lower at RM616.2mil compared with RM731.3mil in 2006, mainly due to a reduction in general freight sales during the year following the cancellation of unprofitable routes and certain flights during the year.

Muhibbah Engineering (M) Bhd registered a 108% growth in profit attributable to shareholders for FY07 to RM70.2mil from RM33.8mil in FY06.

The increase was due to improved operating margins from higher revenue, with better contract pricing and operational efficiency in three divisions – infrastructure construction, cranes and shipyard.

By The Star

UEM World swings into net profit in Q4

UEM World Bhd swung into a net profit of RM275 million for the fourth quarter ended December 2007, compared to a net loss of RM16 million for the corresponding period in the year before. Revenue grew four per cent to RM1.38 billion.

The improvement was due mainly to higher contributions from its property division, gains from the dilution in a foreign subsidiary and a foreign associate, as well as favourable results from joint ventures.

UEM World expects all its divisions to improve their operational results in 2008.

It also expects positive contribution from the construction of the second Penang bridge, works in the Iskandar Development Region and other infrastructure projects under the Ninth Malaysia Plan.

The manufacturing division is expected to benefit from increased activities in the construction industry as well, UEM World said in a statement.

For the full year, it turned to black with a net profit of RM739.3 million while revenue was up 45 per cent to RM5.75 billion.

This was due mainly to the sale of 1,000ha of land to Khazanah Nasional Bhd last June and higher contribution from engineering and construction, manufacturing and healthcare divisions.

The engineering and services segment saw net profit surge by more than 600 per cent to RM286.6 million in 2007, boosted by gains from the New Zealand listing of Opus International Consultants.

The construction division improved to a net profit of RM43.2 million compared to a net loss of RM2.8 million in 2006.

By New Straits Times

Muhibbah doubles Q4, full-year net profits

MUHIBBAH Engineering (M) Bhd has doubled its fourth quarter net profit as it made more money from its construction, crane-making and shipbuilding businesses.

The company expects business to be even better this year as high oil prices spur demand for ships while local construction work gather momentum under the government's five-year plan.

"The group continues to see growth in year 2008," Muhibbah said in a statement to Bursa Malaysia yesterday.

Muhibbah made a net profit of RM19.4 million in the quarter to December 31 2007. Revenue was a third higher at RM418.6 million.

For the full year, it also doubled net profit to RM70.2 million. Revenue was up 31 per cent to RM1.42 billion.

Its infrastructure construction, crane and shipyard divisions had better operating margins and higher revenues due to better contract pricing and operational efficiency.

Muhibbah had orders worth RM4.61 billion as at February 22. About 73 per cent is from the infrastructure construction division, with the rest from its crane and shipyard units.

"With the financial close and successful finalisation of financing facility for the South Klang Valley Expressway (SKVE) project by the client, Muhibbah as the main contractor for SKVE project has commenced the construction work," it said.

By New Straits Times